FTX Victims to Receive 10-25% of Crypto Assets
Victims of the FTX exchange collapse will receive 10-25% of their crypto assets back, according to revised bankruptcy documents. The reimbursement will be based on the price of crypto assets at the time the bankruptcy petition was filed.
For context, Bitcoin’s price has risen from $16,000 at the time of the bankruptcy filing to $66,000 currently. This decision has sparked dissatisfaction among FTX creditors, who argue that using petition date prices does not reflect the current value of their assets.
FTX creditors expressed frustration, citing mental distress, financial hardship, and perceived failure of the law to protect them. However, FTX creditor Sunil Kavuri highlighted that Sam Bankman-Fried violated FTX’s terms of service by using client funds to pay outstanding debts.
Background:
FTX’s collapse resulted in:
- 80% loss of value for its native token, FTT
- $2 billion loss in client funds
- Sam Bankman-Fried’s downfall from crypto billionaire to bankruptcy and 25-year prison sentence
- Caroline Ellison, former Alameda Research head, received a 2-year sentence
Impact on Nigerians:
FTX was popular in Nigeria, with many users holding its FTT token. The collapse resulted in significant losses for Nigerian investors.
Key Developments:
- FTX estate secured $600 million in Robinhood shares to pay off creditors (September 6, 2024)
- Sam Bankman-Fried’s attempts to repay clients amid incarceration
